Asian Legal Business, Issue 4.2

Jia Yuan, a boutique capital markets firm, entered the arena 10 years ago as a challenger. Today, ALB China sees the firm set new quality standards in its specialised area of practice

A leading law Offices is a product of contemporary times. However, Jia Yuan’s success is not just a result of the times when the country is striding onto the global stage as a commercial giant. Jia Yuan is an exemplar of it.   

Entering the capital market ten years ago, the not-so-long history could have made it difficult for Jia Yuan to cut into the market. However, the firm was established with a deliberate strategy that determines its path towards sustainable and prosperous business.   

Instead of developing into a full-service firm, Jia Yuan has chosen to be a dedicated specialist in the capital markets. Not rushing to grow in size, the firm is concentrating on strengthening its expertise.   

With a clear direction in terms of strategy, mission and goals, and a set of core values-“profession, precision, excellence, innovation and cooperation”-the revenue of the firm has been increasing each year since its establishment. The growth is inevitable, regardless of the four-year bear market in the domestic share markets.   

“The firm came into the market as a challenger in 1997. But today, it has one of the leading practices in the capital markets. Its peers and rivals are benchmarking their performance against Jia Yuan,” says He Weiping, one of the five founding partners at Jia Yuan, summing up the firm’s decade of achievement.  

In the firm’s early years, it worked hard to catch up rapidly to the firms which had a head start on it. In recent years, the firm has outperformed most of its rivals. Now, seven partners and more than 50 associates, lawyers and supporting staff form an elite team, pushing back the boundaries in capital markets. Their competence and experience in capital markets has also allowed the firm to extend into the areas of FDI and M&A.

The fruitful 2006

Still to reach its 10-year anniversary, Jia Yuan has had a fruitful 2006. As a result of A-share markets taking off during the past year, Jia Yuan’s annual turnover in 2006 has surged 50% compared to the year before, while the number of staff nearly tripled from around 20 in 2003 to the current size.

By advising in some remarkable deals in the Mainland and Hong Kong, the firm has enhanced its profits and reputation, including receiving recognition from some first-tier international players in the capital markets.  

Domestically, Jia Yuan has advised Shanghai Automotive Corporation on the injection of its RMB21.4bn whole-vehicle and key auto part and component businesses into Shanghai Automotive (SA). After the transaction, SA ranks among the top-10 A-share listed companies by the size of market capitalization and becomes the country’s largest publicly traded auto company. Partners Xu Ying and Shi Benning led the firm’s team.

Most recently, Jia Yuan has acted as the PRC counsel in the Hong Kong listings of China Communications Construction Company(“CCCC”)and China coal. CCCC is the largest domestic company of design, construction and dredging of port, and the world’s largest manufacturer of container cranes. Both teams were headed by partner Yan Yu.  

“Different from the reorganisation and listing of high-quality part of the assets by the SOEs previously, CCCC’s listing creates a new model of wholly restructuring, reorganising and listing of the state-owned enterprises, which may become an important reference for the future listing of SOEs,” says Yan Yu, on the innovation of the listing.

Yan and her team’s outstanding performance has been recognised and appreciated by their international counterparts. One of the world-famous underwriters that have worked with them has commented: “Ms Yan and her team had a huge impact on ensuring the overall execution [of the] timetable. Furthermore, Ms Yan was highly professional and reasonable-with a clear orientation towards problem-solving instead of insistence on legal interpretations. She is great to work with.”

The internal quality

Capability to solve problems and achieve the best business outcome for clients, together with innovation, strong team spirit and high quality services have ensured the successes Jia Yuan has had, and will see are yet to achieve in the future.  

Back in 2004, the TCL IPO advised by Jia Yuan was marked as being an innovation in M&A and securities markets since the Company Law came into effect. In the transaction, a listed company was absorbed and merged by a to-be-listed company and an overall listing of the TCL Group has been realized. The firm also has represented the first PRC company to be listed on AIM in London, and this has constituted some precedents in the overseas M&A for PRC companies.  

The firm’s high quality standards of its services and its strong growth result from the 10-year steady partnership within the firm and the ability of the firm’s members to work as a team.  

“A boutique firm, relying on individuals, is unable to compete with other firms. But if we work together, the synergy between all the partners and lawyers can leverage our expertise and competitiveness, ” says Yan Yu.

In some cases, the legal opinion provided by the firm for an IPO is actually thicker than the prospectuses, such is the extent of the research and documentation. This is the reason Jia Yuan’s name is considered to be the equivalent of “high quality” for the firm’s clients, peers and government bodies. The firm’s involvement in a deal can add to a client’s confidence and sense of security.

The new year plan

Rich opportunities are being provided to law firms, as the country develops towards being the world’s next great power, and the competition in the legal market is becoming increasingly intense. To keep an upper hand over its rivals, Jia Yuan continues to seek and maximise new opportunities.  

Consequently, at the beginning of each year, all partners will work out a new yearly plan. For 2007, it will be“the year of the A-share”for Jia Yuan. This year, the A-share markets will thrive, Yan notes, and the firm will be applying more resources to develop its practice in the domestic market.   

In addition, it will be more focused on providing legal services to mid to large-sized companies, as these have a significant need for a range of services in the capital markets area, including in financing, follow-on financing, attracting FDL and other investment, and M&A with the capital they have raised. Generally, these firms intend to maintain a long-term relationship with their external counsel.  

During ALB China’s visit to Jia Yuan’s office in Beijing, Timothy D. Hesler, a JD candidate of May, 2007 from Indiana University School of Law in the US, who was doing an internship during his Christmas break, described his experiences there as “an overwhelmingly positive experience” and that he had “enjoyed every minute of it”.  

“From my perspective, Jia Yuan is a very successful firm,” he said. “I would attribute that to a primary and intense focus on internal quality, maintaining a high level of competence amongst the attorneys work here, and growing inwardly as they continue to expand externally as well.” 

Although Tim does not yet have a distinct career goal, he is “excited about seeing how, over the next 10 to 15 years, this experience at Jia Yuan plays in my long term career path and fits into possibly other opportunities.”